Surging food and fuel prices are causing Americans to pay more for household expenses. Inflation is now costing the average American family an additional $296.45 in household expenses. This is according to a study made by the New York Post.
Household Expenses Increased by An Average $296.45 Per Month
The latest figures provided by the Labor Department’s Bureau of Labor Statistics showed that inflation rates rose to 7.9% this February.
Ryan Sweet, the senior economist for Moody’s Analytics, said that based on historical spending, household expenses rose by $296.45 per month.
He compared the average spending for February 2018 and February 2019, when inflation stood at 2.1%. “Unfortunately, things will get worse before they get better. Higher energy prices in March are going to boost the [Consumer Price Index],” Sweet said.
Sadly, consumer prices continue to rise even as the Biden administration called out manufacturers for corporate greed. It also blamed supply chain disruptions that left demand exceeding the supply of many items.
Recently, the Biden administration began blaming Russian President Vladimir Putin for high fuel prices. However, many economists believe that the government’s out-of-control spending during the first two years of the pandemic pushed inflation higher.
Russia-Ukraine War To Raise Fuel Prices More
Meanwhile, the heightened conflict between Russia and Ukraine will cause oil prices to go up higher. By extension, fuel prices will also take a hit.
Last week, US fuel prices hit record levels as the average price of a gallon of gas reached $4.17. With no end to the war in sight, Americans are bracing for even higher fuel prices.
Earlier this week, President Joe Biden signed an executive order banning imports of Russian oil and gas.
While it aimed to squeeze the Russian economy, experts expect the decision to further strain the tightening global oil supply. Russia is the second-largest oil exporter in the world, as well as the largest producer of natural gas.
Food, Fuel Prices Leading Inflation Surge
Already, energy prices surged by 25% last February compared to the same month last year. Meanwhile, food prices spiked by 7.9% last month as well.
Beef and chicken showed the highest increases in the market. The surge in prices last February was the highest recorded round of increases since 1982. Biden warned Americans to brace themselves from higher costs as soon as he signed the order banning Russian imports.
As a result, the US Federal Reserve will now have to weigh on continued high prices as they adjust their policies. Chairman Jerome Powell and other officials already committed to hiking interest rates in order to tame inflation.
The only question remaining is how many times will the Fed increase rates. Economists are expecting that the Fed will introduce a series of rate hikes months apart until 2024 or 2025.
Meanwhile, Powell himself is proposing a quarter-percentage-point hike when central bank officials meet later this month.
Watch the WCPO 9 video reporting that Cincinnati shoppers are being more strategic as inflation hits a 40 year high:
What do you think about rising monthly household expenses for Americans? Is $296.45 near your monthly increase in household spending?
Tell us what you think about inflation and its effect on your monthly budget. Share your thoughts in the comments section below.